Ciba-Geigy Corp. v. Murphree, CIBA-GEIGY

• Decision Date: 07 July 1994
• Docket Number: CIBA-GEIGY,No. 91-CA-0386,91-CA-0386
• Citation: 653 So.2d 857
• Parties: CORPORATION d/b/a Funk Seeds International v. Billy Fred MURPHREE and Charles Chrestman.
• Court: Mississippi Supreme Court

Page 857

653 So.2d 857

CIBA-GEIGY CORPORATION d/b/a Funk Seeds International v. Billy Fred MURPHREE and Charles Chrestman.

No. 91-CA-0386.

Supreme Court of Mississippi.

July 7, 1994.

As Modified on Denial of Rehearing April 20, 1995.

W. Wayne Drinkwater, Jr., Lake Tindall & Thackston, J. Collins Wohner, Jr., Butler Snow O'Mara Stevens & Cannada, Jackson, Joseph C. Gibbs, Clarksdale, for appellant.

Stephen L. Henning, Bailey & Henning, Batesville, Cliff R. Easley, Jr., Easley & Cooper, Bruce, for appellees.

Rebecca L. Wiggs, Watkins & Eager, Jackson, Gary Jay Kushner, Mark D. Dopp, Hogan & Hartson, Washington, DC, Paul S. Minor, Minor & Guice, Biloxi, for amici curiae.

En Banc.

SMITH, Justice, for the Court:

Billy Fred Murphree and Charles Chrestman are farmers in Calhoun County. In 1986 they each planted milo seed of the variety G522DR marketed by Ciba-Geigy and purchased from a local merchant. During the course of planting each noticed that some of the seed seemed smaller than expected but each continued planting.

Chrestman contacted representatives of Ciba-Geigy because he was concerned that the seed was some other variety than G522DR. Representatives from Ciba-Geigy verified that the variety was G522DR by The milo seed germinated well and made a good stand. When some of the milo failed to "head out" or form heads of grain, Chrestman and Murphree contacted representatives from Ciba-Geigy.

checking the lot numbers on the bags against company records. When Chrestman was not satisfied with their oral representations, Bob Marshall and Jim Presley, representatives from Ciba-Geigy, signed a Special Warranty Agreement prepared by Chrestman's lawyer that the seed was of the variety specified.

After both farmers produced low yields on their acreage, they filed suit against Ciba-Geigy alleging breach of warranty and negligence.

After a two week trial, the jury awarded Murphree $52,377.00 as actual damages based on the value of the crop if sold and $32,006.00 as consequential damages for the replacement cost of the milo for use as feed. Chrestman was awarded $26,801.14 as actual damages. Each was awarded $500,000.00 in punitive damages.

On appeal Ciba-Geigy raises the following issues:

A. NO PUNITIVE DAMAGES SHOULD HAVE BEEN AWARDED.

(1) PLAINTIFFS FAILED TO INTRODUCE EVIDENCE OF THE FINANCIAL CONDITION OF CIBA-GEIGY CORPORATION.

(2) NO PROOF OF WILLFUL OR WANTON MISCONDUCT SUPPORTS THE AWARD OF PUNITIVE DAMAGES.

(3) IMPOSITION OF PUNITIVE DAMAGES VIOLATED CIBA-GEIGY'S RIGHT TO DUE PROCESS UNDER THE FOURTEENTH AMENDMENT OF THE UNITED STATES CONSTITUTION.

B. PLAINTIFFS FAILED TO PROVE MATERIAL ELEMENTS OF THEIR CASE.

(1) PLAINTIFFS FAILED TO PROVE THAT THEIR CROP LOSSES WERE FORSEEABLE AND COULD NOT REASONABLY HAVE BEEN PREVENTED.

(2) PLAINTIFFS FAILED TO ESTABLISH WITH REASONABLE CERTAINTY THAT THEIR CROP LOSSES WERE CAUSED BY SEED FROM LOT 932.

(3) PLAINTIFFS FAILED TO ESTABLISH THE AMOUNT OF THEIR DAMAGES WITH REASONABLE CERTAINTY.

(4) PLAINTIFFS' SEED SAMPLES WERE IMPROPERLY ADMITTED AND SHOULD NOT HAVE BEEN RELIED UPON.

(5) THE SPECIAL WARRANTY AGREEMENT CANNOT BE CONSTRUED TO INSURE CHRESTMAN AGAINST CROP LOSSES CAUSED BY OVERPLANTING.

(6) THERE IS NO PROOF PRESLEY OR MARSHALL HAD ACTUAL OR APPARENT AUTHORITY TO WARRANT AGAINST CROP LOSS FROM OVERPLANTING.

(7) MURPHREE WAS ALLOWED A DOUBLE RECOVERY FOR HIS LOST MILO.

Throughout this long trial, the evidence from both sides was that the crop failure was caused by adverse dry weather conditions and an excessive plant population. There was conflicting testimony as to the variation in seed size and the seed count per pound and whether the farmers were in a position to adjust their planters to compensate for the variance in size. There was no testimony that the seeds were not merchantable or did not germinate well.

On review, there is no proof which would justify the imposition of punitive damages.

Although the jury verdict for the farmers as to actual damages may be justified under the conflicting evidence, there is no basis for Murphree receiving both the sale price and the cost of replacement of the milo. This would amount to a double recovery.

The award of punitive damages is reversed and rendered. The award of excess or duplicative damages to Murphree of $32,006.00 is reversed and rendered. The other awards of actual damages to Murphree and Chrestman are affirmed.

THE FACTS

In 1986, Billy Fred Murphree and Charles Chrestman, farmers in Bruce, Calhoun County, Mississippi, each planted a variety of milo seed known by the trade name of G522DR and marketed by Funk Seeds International, which is a wholly owned subsidiary of Ciba-Geigy Corporation. Murphree and Chrestman purchased the seed from Tedford Flying Service, a local supplier.

Just prior to finishing planting, Chrestman noticed that the seed in one bag appeared smaller. He testified:

I was pouring those seed in that drill; and I notice those little, dried up, brown-looking seed. I would tell the difference and I said, "Woe, they sent me the wrong milo."

Chrestman finished planting and contacted Tedford. Chrestman took a sample of the seed to Tedford and met with Bob Marshall, the sales representative of Ciba-Geigy. Chrestman expressed concern that the seed was not the G522DR variety but some other variety. David Tedford testified that "that biggest thing it seemed to me he was upset about was that it might have been two or three different variety of seed, and it might grow at different heights, and he might have a problem combining...." Chrestman had saved all the bags and was able to give Marshall all the lot numbers of seed which he planted although he could not remember which lot number was on the small seed. Marshall told Chrestman that he would verify that the seed was the correct variety.

Not satisfied with the verbal representations by Ciba-Geigy, Chrestman had his attorney prepare a Special Warranty Agreement which Marshall and Jim Presley, regional sales manager, signed on behalf of Ciba-Geigy. The warranty provided in part as follows:

WHEREAS, the FARMER purchased Funk's G522DR Milo Seed from Tedford Flying Service.... During the planting of said milo seed the FARMER discovered that several of the sacks ... were found to contain very small seed appearing to be a different type of seed to the FARMER: and

WHEREAS, the FARMER, CHARLES CHRESTMAN, notified and brought a sample of said seed to Tedford Flying Service, and a portion of said sample was turned over to the District Sales Manager for FUNK'S SEED INTERNATIONAL, and said District Sales Manager has assured and warranted to the FARMER that all of said milo seed purchased by the FARMER, are in fact, Funk's G522DR Milo Seed, and there is not any difference in said seed, except as to the size, that are actually being planted; and

WHEREAS, ... if in fact any of said milo seed that has been purchased and planted by the FARMER are of a different variety, or does not grow and produce uniformly as the other Funk's G522DR seed purchased and planted by said FARMER, then said COMPANY agrees to reimburse and hold the FARMER harmless for all damages and expenses incurred, as a result of any difference in the seed, as sold to the FARMER as Funk's G522DR Milo Seed.

Chrestman planted his 334 acres with a grain drill and "drilled probably 98 percent" of the milo himself. Chrestman only noticed small seed in one bag. "That was the only bag I seen small seed." Chrestman did say that he "had four bags with that lot number on it in my empty sacks." He also said that believed he would have noticed any other small seed, "if they had been like that bag that I poured up at my place there."

Before he started planting, Murphree "noticed the seeds were extremely small." Murphree planted 486 acres of milo using a row type or flat plate planter. When Murphree noticed the smaller seed he checked his planting rate and found that his planter "was putting out a few too many seed."

Both plaintiffs' milo came to a good stand during the rainy weather of May and June, 1986. There was no problem with the seed germinating. However, the area experienced a period of below average rainfall in July and August. In most of the fields planted by Chrestman and Murphree the large stalks failed to "head out" or form heads of grain.

Chrestman and Murphree contacted Joe Goforth, the Calhoun County agent, who brought with him Dr. Charles Baskin, an At trial, the plaintiffs' expert, Dr. Daniel Krieg, testified that the combination of extremely wet and extremely dry weather caused the overplanted milo to fail to produce grain. Krieg testified that the wet weather inhibited root development, leaving the milo vulnerable to the subsequent drought because of underdeveloped root structure. Krieg testified that if there had been average rainfall in July that the plaintiffs' milo would have produced an average yield.

agronomist from Mississippi State University, to look at parts of the affected fields. Both Goforth and Dr. Baskin told the plaintiffs that the problem was caused by plant overpopulation and by drought. Dr. Baskin was called as an expert witness on behalf of Ciba-Geigy and repeated what he had told Chrestman and Murphree.

Dr. Krieg's criticism of the milo seed was centered on Lot 932. This lot had been exposed to 3 or 4 nights of freezing temperatures during its 1985 growing cycle. Dr. Krieg stated that of the four lots only Lot 932 could have contained small seed. According to Dr. Krieg, if development of the seed is stopped prior to physiological maturity the seed can shrink and lose size. He stated that the small seed which was introduced as Exhibit P-7 was consistent with damage that stopped development prior to complete maturity of the seed.

The labelling on the bags of milo seed stated that there were approximately 12,500 seeds per pound. Dr. Krieg testified that Lot 932 would have more seed per pound. His testimony was as follows:

Well, I have not...